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fed er al

r e ser ve

b a n k

OF DAL1-AS

Dallas, Texas, July 31,1947.

IN T E R N A T IO N A L D E A L IN G S IN GOLD

To A ll Banking Institutions
in the Eleventh Federal Reserve District:

There is printed below for your information a statement issued jointly by the Secre­
tary o f the Treasury and the Board o f Governors of the Federal Reserve System on July
1 8 ,1 9 4 7 :
It is well known that active speculative markets in gold exist in various
foreign countries. For the most part, these markets are illegal, though in a few
instances importation or sale o f gold is legal or is tolerated. Under present circum­
stances gold is traded in many foreign centers, often against U . S. dollars, at
prices above monetary parities. The premiums differ from one center to another,
so that speculators can make large profits by purchasing gold in one foreign mar­
ket and selling it in another.
The International Monetary Fund recently issued a statement deprecating
international dealings in gold at premium prices, and requesting member coun­
tries to take such action as they can within their jurisdictions to prevent such
dealings. The Fund emphasized that these transactions tend to undermine
exchange stability and cause gold to flow into private hoards rather than into
monetary reserves. Furthermore, in countries where the gold is sold, payment is
often made with dollars illegally acquired or held. Moreover, foreign exchange
which otherwise could be used for sorely needed imports is diverted to the pur­
chase o f gold for private hoards.
In view o f these circumstances, and on general grounds o f the national policy,
the Treasury Department and the Board o f Governors o f the Federal Reserve
System request American individuals, banks and business enterprises to refrain
from encouraging and facilitating this traffic and in particular to refrain from
extending the use o f their facilities and funds for the carrying out o f such
transactions.
Yours very truly,

President

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)


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